Polygon Labs, the entity behind the layer-2 blockchain network Polygon, collaborated with Google Cloud and Accenture on a paper detailing how brands can benefit from integrating Web3-based loyalty programs.
On July 18, the three companies published a paper titled The Future of Loyalty Programs with Web3. The paper explored how brands can transform underperforming loyalty programs to put more emphasis on user experience.
The companies highlighted how Web3 technology can provide secure, scalable and open infrastructure to accelerate the transformation of loyalty programs.
Putting more focus on experiences
The paper argued that consumers seek more meaningful and shareable experiences. According to the paper, consumers crave novelty and connection, which makes them more willing to spend on unique experiences. The researchers wrote:
“This experience-driven economy presents both challenges and opportunities for businesses. [...] To drive consumer loyalty, brands must be more agile to adapt their offers to cater to such.”
The paper argued that the Web3 ecosystem has matured enough to allow brands to transform their loyalty programs into more scalable and cost-efficient endeavors.
The researchers also highlighted that brands have already explored transforming the user journey to drive more engagement.
According to the researchers, brands that have jumped into Web3 programs have already seen several benefits, including improved data insights, novel engagement channels and new revenue streams.
Benefits of blockchain for loyalty programs
Researchers also highlighted that blockchain technology’s integration into loyalty programs has shown several benefits in terms of security, transparency and interoperability.
Blockchain’s inherent security features would protect points and rewards from unauthorized access and fraud. “The decentralized nature of public blockchains ensures that data is stored in a tamper-proof manner,” the researchers wrote.
Moreover, the researchers believe that blockchain transactions’ transparency enhances trust in loyalty programs. In addition, blockchain’s interoperability allows flexibility across multiple loyalty programs.
Apart from these, the researchers believe that brands can also better understand their customers using onchain data. With Web3 data, such as token holdings, non-fungible token purchases, and decentralized finance activity. They wrote:
“Web3 data can be used to identify high-value NFT collectors, active yield farmers, or users interested in specific Web3 communities."
The researchers said these could be used to create more targeted marketing campaigns, products and services.